What Happened To Sports Authority?

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Photo: Sports Authority store in New York (AP Photo)
A woman leaves a Sports Authority store, in New York, Wednesday, March 2, 2016. Sports Authority is filing for Chapter 11 bankruptcy protection. The Englewood, Colo., company has 463 stores in 41 states and Puerto Rico.

Sports Authority is closing its doors for good. The Englewood-based sporting goods retailer declared bankruptcy in March and will sell all of its assets.

But Matt Powell, a sports industry analyst for the market research firm NPD Group, says sporting goods sales generally are strong, driven by demand from millenials.

"Millennials are very focused on fitness and health," Powell told Colorado Matters host Nathan Heffel. "And that's really been driving the business forward for the last four or five years."

So what wrong wrong with Sports Authority? Click the audio player above to hear the conversation, and read highlights below.

On how a 2006 sale to a private equity firm set up Sports Authority for failure:

"Typically, what happens when private equity buys out a company, like they did with Sports Authority, is that they take the debt that they incurred in making the purchase and actually put it on top of the company. So the company itself is forced to try to service that debt. And what often happens is it prevents the retailer from investing in the stores, investing in systems. And that's exactly what happened with Sports Authority; they really fell behind the rest of the industry. ... I think the debt really crushed them."

On how the internet affected the industry:

"It's a huge part of the of the sports business today. And retailers need to be very agile in terms of having a great website, a great web experience for the consumer. And again, I think Sports Authority, because of the crushing debt they had, were not able to make the kind of investments to really have a world-class online business. ...

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"The consumer is very much in control today of what's happening at retail much more than any time in my years of experience. We've seen the consumer really be able to say, 'I want to shop at the store. I want this item, and if you don't have it, I will buy it online or I'll find somebody else who does.' "

On what will happen to remaining stores:

"The best stores will be taken over by other retailers, whether it's another sports retailer or another a big box operator. So if the locations were really quality locations, they will continue to go forward as some kind of a retail store -- likely a sporting goods store. But there are a lot of locations that really aren't very good and you know I think those will simply go away."